Adjustments made under accrual basis accounting

Reference no: EM13152549

A company generating tons of sales will go bankrupt if its expense are out of control, and a company that tightly controls its expenses will fail if it doesn"t generate enough sales. Net profit margin takes this tradeoff into account, and indicates the company"s ability to generate sales while controlling expenses. Pro forma- numbers show what a company"s result would have been had certain events not occurred. Relevant- Does the information help in making decisions? The adjustments made under accrual basis accounting help to ensure the financial statements are complete and up to date. Thereby enhancing their relevance. Reliable- Is the information accurate?

Reference no: EM13152549

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